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B3: SDLT Returns

Duty to deliver a return for every notifiable transaction

"(1)     In the case of every notifiable transaction the purchaser must deliver a return (a “land transaction return”) to the Inland Revenue before the end of the period of 14 days after the effective date of the transaction.

(2)     The Inland Revenue may by regulations amend subsection (1) so as to require a land transaction return to be delivered before the end of such shorter period after the effective date of the transaction as may be prescribed or, if the regulations so provide, on that date." (FA 2003, s.76)
 

Duty to deliver a return for every notifiable transaction

Notifiable transactions​

Notifiable transactions​

- Acquisition of major interest that is not within exception, irrespective of consideration

 

"(1)     A land transaction is notifiable if it is—

(a)     an acquisition of a major interest in land that does not fall within one or more of the exceptions in section 77A," (FA 2003, s.77)

- Acquisition of major interest that is not within exception, irrespective of consideration​

- Acquisition of chargeable interest where consideration chargeable at more than 0% or would be but for relief

 

(1)     A land transaction is notifiable if it is—

[...]

(b)     an acquisition of a chargeable interest other than a major interest in land where there is chargeable consideration in respect of any part of which tax is chargeable at a rate of more than 0% or would be so chargeable but for a relief," (FA 2003, s.77)

Relief does not include exemption

"(3)     In this section “relief” does not include an exemption from charge under Schedule 3." (FA 2003, s.77)

- Acquisition of chargeable interest where consideration chargeable at more than 0% or would be but for relief​

- Deemed land transaction under contract providing for transfer to a third party

 

"(1)     A land transaction is notifiable if it is—

[...]

(c)     a land transaction that a person is treated as entering into by virtue of section 44A(3)," (FA 2003, s.77)

- Deemed land transaction under contract providing for transfer to a third party​

- Notional land transaction under s.75A

 

"(1)     A land transaction is notifiable if it is—

[...]

(d)     a notional land transaction under section 75A," (FA 2003, s.77)

Notifiable prior to amendment

“I am persuaded by this review of the statutory provisions to conclude that the notional land transaction in this case [under s.75A] was notifiable under sections 76 and 77… [S]ection 77(1)(d), as amended, shows that the legislature considered that an obligation to deliver a return in relation to a notional transaction was capable of being performed.” (Project Blue Ltd v. HMRC [2014] UKUT 564 (TCC), §122, Morgan J).

- Notional land transaction under s.75A​

- Pre-completion contracts

 

(1)     A land transaction is notifiable if it is—

[...]

(e)     a notional or additional land transaction under paragraph 5 of Schedule 2A." (FA 2003, s.77)

- Pre-completion contracts​

- Partnership transactions (chargeable transfers of partnership interest)

 

"(1)     A transaction which is a chargeable transaction by virtue of paragraph 14 [transfer of interest in property-investment partnership] or 17 (transfer of partnership interest [pursuant to earlier arrangement]) is a notifiable transaction if (but only if) the consideration for the transaction exceeds the zero rate threshold.

(2)     The consideration for a transaction exceeds the zero rate threshold if one or more of the following conditions are met—

(a)     the relevant consideration for the purposes of section 55 (amount of tax chargeable: general) is such that the amount of tax chargeable under that section is not zero;

(aa)     paragraph 3 of Schedule 4A applies to the transaction;

(b)     the relevant rental value for the purposes of Schedule 5 (amount of tax chargeable: rent) is such that the rate of tax chargeable under that Schedule is 1% or higher."  (FA 2003, Sch 15, para 30)

- Partnership transactions (chargeable transfers of partnership interest)

- Alternative finance further transactions

 

"(7)     A further transaction that is exempt from charge by virtue of subsection (4) is not a notifiable transaction unless the transaction involves the transfer to the person of the whole interest purchased by the institution under the first transaction, so far as not transferred by a previous further transaction."  (FA 2003, s.71A(7))

- Alternative finance further transactions

Exceptions for acquisitions of major interests in land

Exceptions for acquisitions of major interests in land ​

- Exempt under Schedule 3 (other than due to regulations)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

1.     An acquisition which is exempt from charge under Schedule 3 other than an acquisition which is exempt by virtue of any regulations made under paragraph 5 of that Schedule." (FA 2003, s.77A)

- Exempt under Schedule 3 (other than due to regulations)

- Chargeable consideration less than £40,000 (other than grant, assignment or surrender of lease)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

[...]

2.     An acquisition (other than the grant, assignment or surrender of a lease) where the chargeable consideration for that acquisition, together with the chargeable consideration for any linked transactions, is less than £40,000." (FA 2003, s.77A)

- Chargeable consideration less than £40,000 (other than grant, assignment or surrender of lease)

- Grant of lease for at least 7 years (premium less than £40k, rent less than £1k)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

[...]

3.     The grant of a lease for a term of 7 years or more where—

(a)     any chargeable consideration other than rent is less than £40,000, and

(b)     the relevant rent is less than £1,000." (FA 2003, s.77A)

Relevant rent

"(3)     In this section—

“annual rent” has the meaning given in paragraph 9A of Schedule 5,

“relevant rent” means—

(a)     the annual rent, or

(b)     in the case of the grant of a lease to which paragraph 11 or 19 of Schedule 15 applies, the relevant chargeable proportion of the annual rent (as calculated in accordance with that paragraph)," (FA 2003, s.77A)

- Grant of lease for at least 7 years (premium less than £40k, rent less than £1k)

- Assignment or surrender of lease that was originally at least 7 years (consideration less than £40k)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

[...]

4.     The assignment or surrender of a lease where—

(a)     the lease was originally granted for a term of 7 years or more, and

(b)     the chargeable consideration for the assignment or surrender is less than £40,000." (FA 2003, s.77A)

- Assignment or surrender of lease that was originally at least 7 years (consideration less than £40k)

- Grant of lease for less than 7 years (consideration not above zero rate threshold)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

[...]

5.     The grant of a lease for a term of less than 7 years where the chargeable consideration does not exceed the zero rate threshold." (FA 2003, s.77A)

Chargeable consideration for acquisition

"(2)     Chargeable consideration for an acquisition does not exceed the zero rate threshold if it does not consist of or include—

(a)     any amount in respect of which tax is chargeable at a rate of more than 0%, or

(b)     any amount in respect of which tax would be so chargeable but for a relief." (FA 2003, s.77A)

“relief” does not include an exemption from charge under Schedule 3." (FA 2003, s.77A(3))

- Grant of lease for less than 7 years (consideration not above zero rate threshold)

- Assignment or surrender of a lease that was originally less than 7 years (consideration not above zero rate threshold)

 

"(1)     The exceptions referred to in section 77(1)(a) are as follows.

[...]

6.     The assignment or surrender of a lease where—

(a)     the lease was originally granted for a term of less than 7 years, and

(b)     the chargeable consideration for the assignment or surrender does not exceed the zero rate threshold." (FA 2003, s.77A)

Chargeable consideration for acquisition

"(2)     Chargeable consideration for an acquisition does not exceed the zero rate threshold if it does not consist of or include—

(a)     any amount in respect of which tax is chargeable at a rate of more than 0%, or

(b)     any amount in respect of which tax would be so chargeable but for a relief." (FA 2003, s.77A)

“relief” does not include an exemption from charge under Schedule 3." (FA 2003, s.77A(3))

- Assignment or surrender of a lease that was originally less than 7 years (consideration not above zero rate threshold)
Unnecessary return in relation to actual transaction interpreted as necessary return in relation to notional transaction

Unnecessary return in relation to actual transaction interpreted as necessary return in relation to notional transaction

“With some hesitation, I consider that the return in question can be considered to be a necessary return, rather than an unnecessary return, and a return which performed PBL’s obligation under section 76 to deliver a return. On this basis, it was a return in relation to the notional land transaction in accordance with section 75A.” (Project Blue Ltd v. HMRC [2014] UKUT 564 (TCC), §124, Morgan J).
 

Further return where relief withdrawn

 

"(1)     Where relief is withdrawn to any extent under—

(za)     paragraph 11 of Schedule 6A (relief for certain acquisitions of residential property),

(a)     Part 1 of Schedule 7 (group relief),

(b)     Part 2 of that Schedule (reconstruction or acquisition relief), 

[(ba)     paragraph 5, 7 or 8 of Schedule 7A (PAIF seeding relief),

(bb)     paragraph 13, 17 or 18 of Schedule 7A (COACS seeding relief), or

(c)     Schedule 8 (charities relief),

the purchaser must deliver a further return before the end of the period of 30 days after the date on which the disqualifying event occurred.

 

(1A)     Where relief is withdrawn to any extent under—

(a)     any of paragraphs 5G to 5L of Schedule 4A (relief from higher rate under Schedule 4A (higher rate for certain transactions)),

(aa)     Part 3 of Schedule 6C (relief for freeport tax sites), other than in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies,

(b)     paragraph 6 of Schedule 7A (PAIF seeding relief), or

(c)     paragraph 14 or 16 of Schedule 7A (COACS seeding relief),

the purchaser must deliver a further return before the end of the period of 30 days after the relevant date." (FA 2003, s.81)

 

"(1)     Where relief given in respect of a transaction entered into under alternative finance arrangements is withdrawn to any extent under any of paragraphs 6D, 6F, 6G, 6H or 6I of Schedule 4A (higher rate of tax: alternative finance arrangements) or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 11 of that Schedule (alternative finance arrangements) applies—

(a)     the relevant person must deliver a return to HMRC before the end of the period of 30 days after the date of the disqualifying event;

(b)     the return must contain a self-assessment of the additional tax chargeable as a result of the withdrawal of the relief;

(c)     the tax so chargeable is calculated according to the effective date of the transaction in respect of which the relief was allowed." (FA 2003, s.81ZA)

Relevant date

See s.81(1B).

Relevant successor

"(1D)     Where relief is withdrawn to any extent under paragraph 5L of Schedule 4A in a case to which paragraph 5L(4) or (7) applies, the reference in subsection (1A) to the purchaser is to be read as a reference to the relevant successor." (FA 2003, s.81)

"(6)     In subsections (1C), (1D) and (3)(e) (which relate to the withdrawal of relief under paragraph 5L of Schedule 4A) “the relevant successor” means the person who is the most recent successor in the chain of succession at the time relief is withdrawn (and that person could be the first successor, the second successor or a subsequent successor)." (FA 2003, s.81)

Disqualifying event

"(4)     In this section “the disqualifying event” means—

(za)     in relation to the withdrawal of relief under Schedule 6A, an event mentioned in paragraph (a), (b) or (c) of paragraph 11(2), (3), (4) or (5) of that Schedule;

(a)     in relation to the withdrawal of group relief, the purchaser ceasing to be a member of the same group as the vendor within the meaning of Part 1 of Schedule 7;

(b)     in relation to the withdrawal of reconstruction or acquisition relief, the change of control of the acquiring company mentioned in paragraph 9(1)(a) of Schedule 7 or, as the case may be, the event mentioned in paragraph 11(1)(a) or (2)(a) of that Schedule;

(ba)     in relation to the withdrawal of PAIF seeding relief—

(i)     the purchaser ceasing to be a property AIF as mentioned in paragraph 5 of Schedule 7A,

(ii)     a person making a relevant disposal of units as mentioned in paragraph 7 of that Schedule, or

(iii)     the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 8 of that Schedule;

(bb)     in relation to the withdrawal of COACS seeding relief—

(i)     the purchaser ceasing to be a co-ownership authorised contractual scheme as mentioned in paragraph 13 of Schedule 7A,

(ii)     a person making a relevant disposal of units as mentioned in paragraph 17 of that Schedule, or

(iii)     the grant of permission to a non-qualifying individual to occupy a dwelling as mentioned in paragraph 18 of that Schedule;

(c)     in relation to the withdrawal of charities relief, a disqualifying event as defined in paragraph 2(3) or 3(2) of Schedule 8." (FA 2003, s.81)

Later linked transaction: return/further return

"(1)     Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that the earlier transaction becomes notifiable, the purchaser under the earlier transaction must deliver a return in respect of that transaction before the end of the period of 14 days after the effective date of the later transaction.

(1A)     Where the effect of a transaction (“the later transaction”) that is linked to an earlier transaction is that—

(a)     tax is payable in respect of the earlier transaction where none was payable before and subsection (1) does not apply, or

(b)     additional tax is payable in respect of the earlier transaction,

the purchaser under the earlier transaction must deliver a further return in respect of that transaction before the end of the period of 30 days after the effective date of the later transaction." (FA 2003, s.81A)

 

Calculate additional tax based on effective date of earlier transaction

"(1B)     For the purposes of subsections (1) and (1A), any tax or additional tax payable is calculated according to the effective date of the earlier transaction." (FA 2003, s.81A)

 

Return must include self-assessment

"(1C)     Where a purchaser is required to deliver a return under subsection (1) or a further return under subsection (1A)—

(a)     that return must include a self-assessment of the amount of tax chargeable as a result of the later transaction, and" (FA 2003, s.81A)

 

Pay tax no later than filing date

"(1C)     Where a purchaser is required to deliver a return under subsection (1) or a further return under subsection (1A)—

[...]

(b)     the tax or additional tax payable must be paid not later than the filing date for that return. (FA 2003, s.81A)

 

Still required to submit any return for later transaction

"(3)     This section does not affect any requirement to make a return under section 76 in respect of the later transaction." (FA 2003, s.81A)

Schedule 10 applies

"(2)     The provisions of Schedule 10 (returns, enquiries, assessments and other matters) apply to a return under this section as they apply to a return under section 76 (general requirement to deliver land transaction return), with the following adaptations—

(a)     in paragraph 5 (formal notice to deliver return), the requirement in sub-paragraph (2)(a) that the notice specify the transaction to which it relates shall be read as requiring both the earlier and later transactions to be specified;

(b)     references to the effective date of the transaction to which the return relates shall be read as references to the effective date of the later transaction." (FA 2003, s.81A)

 

Content of return

Content of return​

- Must be in the prescribed form

"(1)     A land transaction return must—

(a)     be in the prescribed form,

(b)     contain the prescribed information, and

(c)     include a declaration by the purchaser (or each of them) that the return is to the best of his knowledge correct and complete.

[...]

(5)     The return is treated as containing any information provided by the purchaser for the purpose of completing the return." (FA 2003, Sch 10, para 1)

"(2)     References in this Part of this Act to the delivery of a land transaction return are to the delivery of a return that—

(a)     complies with the requirements of paragraph 1(1) (contents of return)" (FA 2003, Sch 10, para 2)

- Must be in the prescribed form

- Must contain self-assessment

"(3)     A land transaction return in respect of a chargeable transaction must—

(a)     include an assessment (a “self-assessment”) of the tax that, on the basis of the information contained in the return, is chargeable in respect of the transaction," (FA 2003, s.76)

- Must contain self-assessment

- Declaration of correctness by person authorised to act on behalf of taxpayer by power of attorney

"(1)     This section applies to the declaration mentioned in paragraph 1(1)(c) of Schedule 10 (declaration that return is correct and complete).

(2)     The requirement that an individual make such a declaration (alone or jointly with others) is treated as met if a declaration to that effect is made by a person authorised to act on behalf of that individual in relation to the matters to which the return or certificate relates.

(3)     For the purposes of this section a person is not regarded as authorised to act on behalf of an individual unless he is so authorised by a power of attorney in writing, signed by that individual.

In this subsection as it applies in Scotland “power of attorney” includes factory and commission.

(4)     Nothing in this section affects the making of a declaration in accordance with—

(a)     section 100(2) (persons through whom a company acts)," (FA 2003, s.81B)

- Declaration of correctness by person authorised to act on behalf of taxpayer by power of attorney

- Declaration by agent

"(1)     Where—

(a)     the purchaser (or each of them) authorises an agent to complete a land transaction return,

(b)     the purchaser (or each of them) makes a declaration that, with the exception of the effective date, the information provided in the return is to the best of his knowledge correct and complete, and

(c)     the land transaction return includes a declaration by the agent that the effective date provided in the return is to the best of his knowledge correct,

the requirement in paragraph 1(1)(c) shall be deemed to be met.

(2)     Sub-paragraph (1) applies only where the return is in a form specified by the Inland Revenue for the purposes of that sub-paragraph.

(3)     Nothing in this paragraph affects the liability of the purchaser (or each of them) under this Part of this Act." (FA 2003, Sch 10, para 1A)

- Declaration by agent

- Declaration by Official Solicitor for person with disability

(1)     Where—

(a)     the purchaser (or any of them) is a person under a disability,

(b)     the Official Solicitor is acting for the purchaser (or any of them), and

(c)     the land transaction return includes a declaration by the Official Solicitor that the return is to the best of his knowledge correct and complete,

the requirement in paragraph 1(1)(c) shall be deemed to be met.

(2)     Sub-paragraph (1) applies only where the return is in a form specified by the Inland Revenue for the purposes of that sub-paragraph.

(3)     Nothing in this paragraph affects the liability of the purchaser (or each of them) under this Part of this Act.

(4)     In this paragraph “the Official Solicitor” means the Official Solicitor to the Supreme Court of England and Wales or the Official Solicitor to the Supreme Court of Northern Ireland (as the case requires).(FA 2003, Sch 10, para 1B)

- Declaration by Official Solicitor for person with disability

Land transaction not to be registered without certificate of compliance

 

"(1)     A land transaction to which this section applies, or (as the case may be) a document effecting or evidencing a land transaction to which this section applies, shall not be registered, recorded or otherwise reflected in an entry made—

(a)     in England and Wales, in the register of title maintained by the Chief Land Registrar,

(b)     … or

(c)     in Northern Ireland, in any register maintained by the Land Registry of Northern Ireland or in the Registry of Deeds for Northern Ireland,

unless there is produced, together with the relevant application, a certificate as to compliance with the requirements of this Part in relation to the transaction or such information about compliance as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations.

This does not apply where the entry is required to be made without any application or so far as the entry relates to an interest or right other than the chargeable interest acquired by the purchaser under the land transaction that gives rise to the application." (FA 2003, s.79(1))

 

All notifiable transactions caught unless excepted

(2)     This section applies to every notifiable land transaction other than a transaction treated as taking place—

(a)     under subsection (4) of section 44 (contract and conveyance) or under that section as it applies by virtue of—

(i)     …

(ii)     paragraph 12B of Schedule 17A (assignment of agreement for lease), or

(b)     under subsection (3) of section 44A (contract providing for conveyance to third party) or under that section as it applies by virtue of section 45A (contract providing for conveyance to third party: effect of transfer of rights).]1

(ba)     under paragraph 5 of Schedule 2A (transactions entered into before completion of contract),

(c)     under paragraph 12A(2) …1 of Schedule 17A (agreement for lease), or

(d)     under paragraph 13 (increase of rent) or 15A (reduction of rent or term) of that Schedule.

In this subsection “contract” includes any agreement and “conveyance” includes any instrument.

(2A)     Subsection (1), so far as relating to the entry of a notice under section 34 of the Land Registration Act 2002 or section 38 of the Land Registration Act (Northern Ireland) 1970 (notice in respect of interest affecting registered land), does not apply where the land transaction in question is the variation of a lease." (FA 2003, s.79(2) - (2A))

Certificate that land transactions return delivered

"(3)     The certificate referred to in subsection (1) must be —

(a)     a certificate by the Inland Revenue (a “Revenue certificate”) that a land transaction return has been delivered in respect of the transaction," (FA 2003, s.79(3))

Land transaction not to be registered without certificate of compliance

Amendment of return by purchaser

See B6: Amendment of direct tax returns

Amendment of return by purchaser ​

Duty to retain information relating to non-notifiable transactions

 

"(5)     Part 2 of Schedule 11 imposes a duty to keep and preserve records in respect of transactions that are not notifiable." (FA 2003, s.79(5))

Duty to retain information relating to non-notifiable transactions

HMRC power to treat lost/damaged return as not delivered

 

"(1)     This section applies where—

(a)     a return delivered to the Inland Revenue, or

(b)     any other document relating to tax made by or provided to the Inland Revenue,

has been lost or destroyed, or been so defaced or damaged as to be illegible or otherwise useless.

(2)     The Inland Revenue may treat the return as not having been delivered or the document as not having been made or provided.

(3)     Anything done on that basis shall be as valid and effective for all purposes as it would have been if the return had not been made or the document had not been made or provided.

(4)     But if as a result a person is charged with tax and he proves to the satisfaction of the tribunal having jurisdiction in the case that he has already paid tax in respect of the transaction in question, relief shall be given, by reducing the charge or by repayment as the case may require." (FA 2003, s.82)

HMRC power to treat lost/damaged return as not delivered
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